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Cyrus Mistry quits Tata group company boards, but vows to fight on

December 19, 2016 at 02:16 pm EST

MUMBAI (Reuters) - Tata Sons' [TATAS.UL] ousted chairman Cyrus Mistry in a surprise move late on Monday said he was resigning from the boards of all listed Tata companies, but he vowed to keep fighting to improve governance within the $100 billion software-to-salt conglomerate.

In a letter to all shareholders, Mistry hinted that he plans to continue his battle against Tata Sons in court. And a source close to the matter, who declined to be named, confirmed that Mistry plans to file a lawsuit in coming days.

Mistry has for weeks waged a war of words against Tata Sons and Tata family patriarch Ratan Tata, who is back at the helm of the conglomerate on an interim basis.

Mistry has alleged that Tata and his long-time aide Noshir Soonawala, both trustees of Tata Trusts which owns a majority stake in Tata Sons, undermined group company boards by demanding a say in key internal matters years after they had retired. Tata Trusts is a group of public charities.

Tata Sons has rejected the allegations, and on Monday it reiterated its stance, calling Mistry's allegations "baseless, unsubstantiated and malicious."

Mistry's surprise resignation comes just ahead of a series of special shareholder meetings called by Tata Sons to oust him from the boards of five Tata companies, Indian Hotels (>> Indian Hotels Company Ltd), Tata Steel (>> Tata Steel Limited), Tata Motors (>> Tata Motors Limited), Tata Chemicals Ltd (>> Tata Chemicals Limited) and Tata Power (>> Tata Power Company Limited).

The meetings to vote on Mistry's ouster were set to begin on Tuesday. While the Indian Hotels and Tata Motors meetings are likely to be rendered not required, a spokesman for Tata Sons said the other three meetings are likely to go ahead as Tata Sons is also seeking to oust independent director Nusli Wadia from those group company boards.

Wadia has publicly backed Mistry's allegations of corporate governance failures within Tata Sons, and accused both Tata and Soonawala of overstepping boundaries.

Tata Sons, in its statement on Monday, said Mistry's move to resign came as he was aware that Tata Sons was set to secure the necessary support to oust him at the upcoming meetings.

Tata Sons owns substantial stakes of over 30 percent in all of the five Tata companies that had upcoming meetings, and Tata Sons' moves to oust Mistry were widely expected to succeed.

Mistry, who continues to be a director on the board of Tata Sons where his family owns a more than 18 percent stake, vowed to keep fighting his campaign.

"It is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata Group," he said in his letter on Monday, the latest of several exchanged between the two camps over the last two months.

"It is with this thought that I have decided to shift this campaign to a larger platform and also one where the rule of law and equity is upheld."

(Editing by Euan Rocha, Alexander Smith and Susan Fenton)

By Promit Mukherjee and Abhirup Roy

Stocks treated in this article : Tata Motors Limited, Tata Steel Limited, Tata Chemicals Limited, Indian Hotels Company Ltd, Tata Power Company Limited, Tata Consultancy Services Limited

Stocks mentioned in the article

Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
TATA MOTORS LIMITED	986.8 INR	+1.36%	-1.21%	42.74B
TATA STEEL LIMITED	161.2 INR	-0.43%	+0.19%	24.23B
TATA CHEMICALS LIMITED	1,115 INR	-0.04%	+1.16%	3.41B
THE INDIAN HOTELS COMPANY LIMITED	604.3 INR	+3.24%	+1.13%	9.97B
TATA POWER COMPANY LIMITED	429.6 INR	+0.40%	-0.45%	16.4B
TATA CONSULTANCY SERVICES LTD.	3,875 INR	+0.26%	-1.69%	168B

Ratan Naval Tata

Ratan Tata is at the head of Tata Group, a conglomerate of hundreds of subsidiaries among these Tata steel, the fourth largest steel company in the world, Tata Motors and Tata Telecom.

He graduated from Cornell University in New York; Ratan declined a proposal from IBM to join the Tata group. He began his career in steel branch of the group, where he stayed until 1971, where he was appointed Director of National Radio & Electronics Company (NELCO), company of the Tata group. In that period the company had met many difficulties, and then he bet on a new technology. In four years, the market share of Nelco rose to 20% from 2%, but this success will be very short.

In 1975 Indira Gandhi was Prime Minister, recession hit the country, the business suffered and social movements paralyzed Nelco’s production. The crisis will be strong as Nelco is forced to close.

In 1977 Ratan was in charge of the textile factory of the group, but the latter still using old technologies and suffered the competition of new factories. Ratan proposed to start a modernize process but the group didn’t give to him a financial support. In 1985, the factory closed.

In 1986 he was appointed chairman of Tata industries, before becoming in 1991 the CEO of Tata group. He began a restructuring process in order to draw seven areas of activity, in add he invited the old managers to leave the place in benefit to younger people.

In 2000 Tata bought Tetley Tea, English tea maker, this is the start of construction of the Tata empire.

In 2007, Tata acquired for $2.6 billion the anglo-dutch group Corus, specialist in steel and aluminium, and his group became the fourth largest steel producer in the world.

In March 2008, he bought two historic brands in the automobile sector, Land Rover and Jaguar for $2.3 billion, and he became the boss of 16000 UK employees. In late 2008, the automotive industry crisis brings down the manufactures’ profits nearly 30%, for this reason Tata decides to ask to Brown’s government to save Tata motors, and he requires a bill out of one billion dollars.

Tata group, it counts now 98 subsidiaries, 300 000 employees and 3.2% of Indian GFP.

In June 2011, the market capitalization of Tata group reached 4.32 trillion rupees, or $87 billion, and it is the first Indian group.

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Linked companies
Tata Teleservices Ltd. Tata Teleservices Ltd. Wireless TelecommunicationsCommunications Tata Teleservices Ltd. provides telecommunications services. It services include mobile services, wireless desktop phones, public booth telephony and wireline data services. The firm also provides Wi-Fi internet services, three-way conferencing and post-paid internet services. Tata Teleservices was founded by Ratan Naval Tata in 1996 and is headquartered in Mumbai, India.	Chairman
Sir Ratan Tata Trust	Chairman

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